A loyalty card, also known as a rewards card, points card, discount card, or club card, is an identifier that identifies the card holder as a member of a commercial incentives program. The identifier generally follows the form factor of a credit card-sized plastic card. Loyalty cards may be used in hotels, stores, clubs, airlines, and many other establishments desirous of tracking their customer/client base. In the case of a hotel loyalty card program, the card may be read in the lobby of the hotel, in order for the hotel to be advised that a specific client/hotel guest has arrived.
Known loyalty cards typically employ a scannable barcode or magstripe on the back of the card. The back of the card is scanned in order to authenticate the identity of the consumer and/or the transaction. Small keyring cards are often used for convenience. A retail establishment or a retail group may issue a loyalty card to a consumer who can then use it as a form of identification when dealing with that retailer. By presenting the card, the purchaser is typically entitled to either a discount on the current purchase, or an allotment of points that can be used for future purchases.
Typically, the card issuer requests or requires customers seeking the issuance of a loyalty card to provide a minimal amount of identifying or demographic data, such as name and address. Application forms usually entail agreements by the store concerning customer privacy, typically non-disclosure (by the store) of non-aggregate data about customers. Where a customer has provided sufficient identifying information, the loyalty card may also be used to access such information to expedite verification during receipt of checks or dispensing of medical prescription preparations, or for other membership privileges (e.g., access to a club lounge in airports, using a frequent flyer card).
It is also highly likely that consumer purchases are tracked and analyzed towards more efficient marketing and advertising (in fact one of the purposes of the loyalty card). There also remains the possibility that law enforcement agencies could be granted access to the stored information during an investigation of a customer's activities. For example, in 2004, a Winn-Dixie key-ring card was left behind at the scene of the crime, which led police to the perpetrator of the crime.
In the U.S., several major supermarket chains and at least one major pharmacy require the cards in order for customers to receive the advertised loyalty price. These include Kroger and Safeway (each through both their own name and many of their regional chain names), Albertsons, Winn Dixie, Harris Teeter, Ingles, Giant Eagle, Tops, and CVS/pharmacy. Some have tie-ins with airline frequent flyer programs, and some agree to donate a percentage of sales to a designated charity.
The practice is also common among book and music retailers, from large chains to independent retailers. In some instances, the customer purchases the card and receives a percentage discount on all purchases for a period of time (often one year), while in other instances, a customer receives a one-time percentage discount upon reaching a specified purchase level. (For example, a bookseller's loyalty card program might provide a customer with a 10% off coupon once the customer has spent $200.00 at the bookseller.) Best Buy's loyalty program similarly offers points redeemable for dollar-amount discounts after accumulating a set number of points along with other discounts from time to time, though the card is not required to receive their advertised price in most cases. In addition, office supply retailers Staples, Inc. and Office Depot started issuing club cards in 2005.
Almost all of the major hotel chains (Best Western, Choice Hotels, Holiday Inn, Marriott, Super 8 Motels, etc.) have similar cards that allow guests to earn either points (redeemable for discounts, future stays or other prizes) or airline miles (Hilton's HHonors program allows guests to earn both points and miles on the same stay, the only program to date that does so). All major US Airlines also offer rewards credit cards. Two major petrol distributors have adopted the Exxon-Mobil Speedpass which is not only a loyalty token, but also contains a mechanism for authorizing electronic payment, used by over seven million customers worldwide (in 2004).